If you are like all of the rest of the people that work in the insurance industry, you did not grow up thinking “I want to work for an insurance company when I grow up.” Most, if not all of us, grew up without any knowledge of the insurance industry and its role in the economy. However, without insurance and the ability that it gives us to spread risk, the economy would likely fail. For example, if we did not have property insurance to help rebuild communities hit by tornadoes, hurricanes, or other severe weather events, our communities would not likely be able to survive these catastrophic losses. For this reason alone, we should feel passionate about being able to provide protection for our clients against the risk of significant financial loss that they would otherwise suffer without proper insurance coverage.

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The insurance industry has been around for centuries. Lloyd’s of London is one of the early forms of insurance that dates back to the 17th century. Benjamin Franklin is credited with having a key role in the development of fire insurance in North America with a company that was formed in 1752 and still exists today.¹ Although the policy coverages and forms may have changed significantly over time, the purpose remains the same, to spread the risk and provide financial security.

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There are many ways that the insurance industry provides financial security and support to the economy in general. For example, in 2017

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…the insurance industry paid roughly $1.5 trillion (an average of $125 billion per month) to help claimants and beneficiaries rebuild their lives, property, and businesses, and get medical care. Health insurers paid $589.9 billion, life/annuity insurers provided $590.3 billion and property/casualty (P/C) insurers paid $414.6 billion.²

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Without these significant payments from insurance companies, many individuals and families would have suffered additional tragedies at what would have already been difficult times.

 

In addition to making payments for terrible losses suffered from bad weather events, insurance allows us to finance important purchases of things like homes and vehicles. The availability of insurance also helps individuals to obtain the necessary financing to start or build a business. The banking industry certainly would not be willing to make any significant loans without insurance being available to protect the collateral of the loans.

 

Whatever the reason, we have all become part of the insurance industry and now play a vital role in assisting our clients protecting themselves from what can be overwhelming results of catastrophic loss.

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Tom Lyons, Vice President of Claims and Legal

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¹ Insurance 101, https://www.iii.org/article/insurance-101, Insurance Information Institute.

   This article contains a good summary of the history and purpose of insurance.

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² How Insurance Drives Economic Growth, Dr. Steven Weisbart, CLU, https://www.iii.org/white-     paper/how-insurance-drives-economic-growth, p.6, June 4, 2018.

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